Alibaba planning its own mobile OS?

The competitive landscape for mobile companies in China might be getting much more more complicated: the Wall Street Journal reports (subscription required) Chinese ecommerce giant Alibaba is planning to launch its own mobile phone operating system for the Chinese market in the third quarter of 2011. The report cites sources close to the project and indicates the OS will offer cloud-based applications running on remote services that users would essentially access using mobile phones as thin clients. If true, that architecture is almost the opposite of that offered by other smartphone platforms, which rely on users downloading native apps to add additional functionality.

If Alibaba enters the mobile operating system marketplace, it will undoubtedly leverage it is huge stable of existing ecommerce and online marketplace services, which include the China Yahoo Web portal and a tight relationship with the just-spun-off Alipay online payment service. That back end could give an Alibaba operating system a solid competitive edge in the Chinese market as western companies struggle to develop Chinese-language app stores and content offerings.

Yahoo owns a 43 percent stake in Alibaba. In recent months, that investment (and Yahoo’s stake in Yahoo Japan) have become increasingly important components of Yahoo’s financial underpinnings as the company tried to refocus and turn around its Web-based search, services, and advertising businesses. Yahoo and Alibaba are currently at odds of Alibaba’s spin-off of Alipay, which Yahoo says was done without board vote or approval. Last month, the companies reiterated they were committed to resolving the issues, but there have been no updates or announcements on the situation.

China’s leading search engine, Baidu, is also reportedly working on its own mobile operating system. Baidu just signed an agreement with Microsoft to have Bing power its English-language searches.